My Framework To Reassess An Altcoin Portfolio (HOLD or SELL)

You may have in your crypto portfolio a bunch of altcoins that may actually be about to die, or even worse, they might already be dead. Cryptocurrencies basically have no value. They don't produce anything. For so many of us, we think and hope of the illusion of these altcoins going back to all time highs, getting back to where we bought into them just to break even. But in reality, a lot of these cryptocurrencies are actually dead. Are we at the bottom? Could this be the bottom?

Now, I could sit here like every other YouTuber and tell you that it's all going to be fine. The bull market's just around the corner. H diamond hands, let's all make money. But the reality is most of those coins in your portfolio are probably dead. So I'm going to give you a framework so you can actually analyze logically what you should hold and what you should sell to other coins. Because the opportunity cost of holding a coin that underperforms in this bull market I believe could be life changing in the amounts of money you could make. This bull market I believe is going to be the biggest we've had yet and probably the last to make life changing amounts of money. So you do not want to hold a coin that is going to underperform and actually probably be already dead in this next cycle. So let's paint a bit of a picture because I've been here in the past where you bought a coin in a previous cycle and you've held it all the way up and maybe all the way down again. It's down 20%, 30%, 50%, heck, maybe 90%. And you're wondering whether or not you should sell it. It's something you're emotionally attached to. You're a part of the discord, you're in the Twitter. You're so excited about this narrative, but yet the price has done nothing. You're seeing other coins go, you're seeing, you're seeing Solana run up, Solana airdrops Depin. You're seeing all these things pop off that you don't have exposure to because you're holding these coins that are not performing and you're wondering, what should I do? And we've all been here in the past and I think for so many of us, we get attached to these coins because of maybe the money we've invested. The opportunity cost of what happens if we sell. We're already down 80%, so why not just hold it for the next cycle? But I think the biggest thing here We've got to consider is that for 90 to 95% of the cryptocurrencies in this ecosystem, I believe a complete, completely worthless, they don't have utility. All they have is they had a strong community and maybe a founder that was pumping the price. Maybe some influences that got you excited and some fomo, maybe some friends were involved and that's what's holding you onto that token. Not a logical decision to hold a token because of the future potential of that narrative, because of the utility that's providing, maybe the solution, that it's actually solving the big problem. You're not even thinking about that anymore. You're thinking about what's new, what's next, and you're just holding that because it's down so much. So we're going to walk through a bit of a step by step fundamental list to help you decide whether or not you should sell. Now, before that, we've got to take a little bit of a step back and think about, you know, why we're not actually making a decision in the first place. And it comes down to emotion. It comes down to psychologically, we've become attached to this coin. Maybe it's driven by fear or anxiety or probably uncertainty about that coin. You know, I've been there in the past where I've sold a coin too early and then it's ran up 30, 40, 50x. I missed out on millions of dollars because I wasn't patient and I didn't make a logical decision. I made an emotional decision. I, I was impatient, I got frustrated, I saw everything else pumping but my token. So I sold it. And within literally weeks or months later, that thing absolutely skyrocketed. Right? And that fear of missing out of those gains beforehand is super problematic. And the feeling you have afterwards if you sell something for runs up is even worse. Right? But you've got to play the cards that are laid in front of you and you've got to deal with the assets that you have, with the information that you have in front of you. And burying your head in the sand and hoping it's going to come back is not a logical decision. You've got to base your decisions based on logic and not emotion, not based off what people online are telling you about, where they think the price will get to. Because guess what? A lot of people online, especially YouTube influencers, are incentivized to pump the price of these tokens because they might own a bunch themselves or they're being paid to promote it. The best hidden gems, the best Coins I believe that can actually make substantial life changing amounts of money and that I've invested in the past, have not had influences, have not had Twitter people posting about them, have not paid people to promote them online. The best cryptocurrencies are driven based on the value that they provide, the utility, the token economics, the problem that they solve, not by how good their marketing is. So let's take a little look back at the history of cryptocurrencies because this gives us a really good indication at how much things change in this space. If we just look back at CoinMarketCap from 2017 and look at the coins here we had in the top 10, the top two has always been Bitcoin, Ethereum, but then you've had the likes of Litecoin, Monero, Ethereum, Classic Dash made, safe coin like what on earth is that that was ranked number eight in 2017. Nem auger, steam factor. The previous cycles changed so much and in fact 99% of coins will fail to reach all time highs again because of the utility that they didn't provide. Cryptocurrencies are fundamentally built off speculation first, speculation first, then it needs to derive value. But for so many of these coins that were driven off speculation, they didn't find any value, they didn't know what they were doing, they raised a bunch of and they haven't found product market fit. So they go and die in the crypto ecosystem. So by looking at history and looking at how much the top 10 has changed just over the last few years, you can now start to see that what we have now in the top 10 won't be the same in the next few years. So speculation only allows us to get to a certain point of price and only allows us to maintain that price for a certain period of time. You've got to go lower and you've got to look at the on chain, you got to look at the fundamentals and you've got to look at the actual value that is deriving. And it's what we focus on at Collective Shift when we're investing and sharing investment tips with our members is we're looking at fundamental value. There's one project that Matt, our head analyst posted In February of 2023, project called Pendle, that you're probably all aware of right now, back in February, that has done over a 1500% gain since that date. And no one was talking about this space back then, no one was talking about Pendle, there was no influencers talking about it. But yet the utility and Value and potential future narrative of that space was what was most important. Matt caught onto that, shared it and it's now done over and is predicted to go even higher now that everyone's talking about it. So to get into assets and hold assets that have future projected price, it's about value, it's about utility, it's not about the marketing, it's not about the community, it's not about speculation. Yes, that will get you so far, maybe that will get you a price pump in the bull market. But if you're wanting to maintain future value for a long period of time, you've got to go deeper. Okay, so is your cryptocurrency actually dead? There was a report done by Coingecko that actually over 50% of all cryptocurrencies have already died since 2014. So you can actually go and see if yours is on the list. You can head over to Queen Get Go and you can have a look at that. Another free tool is Root Data. They have an archive of list of crypto projects that have failed in 2023 by announcing a closure, entering bankruptcy or even having an inactive website. So you can check out the site, it's on the screen here. You can see if you're holding a dead crypto project. But maybe your cryptocurrency isn't dead, it's still alive. They still seem to be doing things. There still seems to be volume. I'm going to walk you through now a list that the analyst and I have put together as a like a checklist to look through each of these tokens to figure out whether or not you should hold it or whether or not you should sell to another project. And it's something I've this exact checklist through my portfolio of the last few years to maintain an up to date portfolio because things change. I try not to be emotional, but sometimes we are. We do get emotionally attached to projects, especially if we think this project or this narrative is going to be big. We have conviction and then we might actually just go and try and find people to like, you know, confirm our thinking. It's called confirmation bias. Maybe you've bought something and then you head over to Twitter, you type in the ticker just to see who else is talking about who else is bullish on this narrative. But it's important to get different perspectives. And this is a fundamental list that you can use to actually analyze this. A logical basis, not from an emotional one. So first of all, let's take a look at the fundamental analysis approach. You can Evaluate each altcoin against the criteria like project development, community support, real world adoption, and token economics. So we like to use the following table to evaluate each coin against 10 questions from our fundamental list. And you can just tick these yes or no, you can write these down or you can head over to our website and go to the research tab and you can have a look at this checklist. So I look at first of all, the timing. Do they solve a growing need? Is the problem that they solving actually in the realm of needing to be solved right now? I think a lot of projects that I speak to that I evaluate, one of the access that we get at Collective Shift is that because of our community, because of our brand, we can actually go and reach out to these projects. We can speak to the founders. A lot of these projects are very technical, they're very technically led. The projects are building these super cutting edge projects. They're on the cusp of innovation, but they're probably solving for problems that don't need to be solved for a number of years. So they're relying on speculation of that future narrative to drive price. Sometimes you can get in on projects too early and we've seen this a number of times before, right? You know, maybe it was the real world asset narrative that was back in 2017, 2018. Maybe it was getting into the metaverse too early, before that was even a thing. Even if we think about like VR and ar, we think about these different technologies, they're taking a long time to catch up to when consumers can actually use them. So thinking about timing of that project is super important. Are they still building for a lot of these projects that have been around for a number of years? They might not even really be building anymore. Maybe they've had to cut expenses, they've had to cut their development team. They don't have that firepower to continue building the roadmap. Maybe the founders have got a new project that they're working on. Maybe they're not as passionate as they were before. So going deep on this, looking at Twitter, looking at Discord, looking at their GitHub, are they still pushing out code? Are they developing and are people using the project? Do they have a community of developers and a growing ecosystem? This is a really good one that we look on chain to look and see if the people that are using the project are still there, other developers interested, and even looking at what layer one that project is built upon, Is that on a dying layer one? Is that on a blockchain that isn't really even really moving anymore. Right? So that's another thing you've got to think about the leverage and the blockchain that's being built on not only the project, but the blockchain and layer one itself. Are they active across their socials? Are they creating content? Are they making partnerships? Are they still pushing the narrative forward, or are they just retweeting random stuff? But I see this a lot with dead projects that are just kicking the can down the road. They don't want to put up the foreclosure sign. They just want to showcase they're still active so they don't have to, you know, go down and cop the brute force of crypto, Twitter and PR when they actually shut down. So they're just retweeting stuff. They're kind of just, you know, kicking the can down the road, hoping for a bull market and maybe paying themselves a bit of money just to stay afloat. That is not a project you want to be a part of. The best projects are built out of these, you know, these sideways times, these bear markets. Synthetics, for one. This was a massive project Uni swap. It was built out of bear markets. Right? And as we head into this bull market, you don't want to be just relying on projects to be waiting and hoping for the bull market to come back. Have they gained any legitimate adoption? So for me, an interesting one is like Polygon, for example. I've been super bullish on Polygon and Matic for a little while. They announced a lot of partnerships. One of them was Starbucks. This was a great partnership announcement. But the next step now, after a few months, is actually to go a little bit deeper and figure out, you know, what was this partnership? Has it gone through? Are they actually doing this? Or was this just a marketing spin, you know, to get people interested? This is where we've got to go a little bit deeper than just reading the headlines and reading the narratives online. We've got to go a little bit deeper and see that adoption, see what they're actually doing and see the partnerships and utility revenue users who's actually using the chain. Do they have sufficient Runway left? This was a big one. When we're in the bear market, we saw a lot of projects burning a lot of money. For example, we did a research piece on imx, you know, Immutable X. They were burning a lot of money on a month by month. But now as you go deeper, you can actually see the utility, the on chain movements, the amount of users they've got, the amount of people Playing their games, amount of revenue they're creating, they were burning a lot of money in the bear market, but it's set up for now where they're getting more and more people playing their games. But for other projects, they haven't been able to find product market fit yet. They might be running out of Runway, they might be running out of time. How much is their treasury? Right? Even if you're Looking at like NFTs for example nouns, DAO is an interesting one, right? The nouns DAO NFT has plummeted in terms of their ETH floor price. But if you look at their treasury, they have tens of millions, if not hundreds of millions of Ethereum in their treasury pool. They have a Runway to last them a lifetime. So don't just look at the frontline metrics, go a little bit deeper, look at their tbl, look at their Runway. Look at how many people are using and building on the platform to ensure that they know they have enough time. Are the token economics sound or broken? Another thing that a lot of people do is thinking that their project is just going to get back up to all time highs. They can just get back up to all time highs will be great. But if that all time high was in, you know, more than just a few months prior, like let's say years prior, what's actually happened to a lot of those tokens is that massively increased their supply. So they've pushed out more and more tokens over the last few years, which just to get back to all time high is actually a lot more in terms of market cap to get back to that point price because of the inflation of their supply. So going deeper on their token economics, have they improved this? Is it still biased towards the founders? Is it still biased towards VCs or are they burning their supply? Are they limiting their supply? Is it actually more in favor of you, the retail investor? That's the thing you need to be looking at. Just because a project has a great product doesn't mean the token has great token economics either, right? Crypto is different to the share market. Having shares in a company outside of crypto is usually derived off revenue, ebitda, these sorts of things gives you that share price, that value. Crypto is not the same. You know, if you think about uni swap and then the token uniswap is a great product. But are the token economics actually that great? It's something we need to consider. It's not the same. So you need to evaluate the product and the token to ensure that there's value alignment. Do they have an outdated narrative? Is the narrative dead right? We saw AI come and go super quick in the ecosystem. It was something we were pretty bearish on in the short term just because of that narrative we thought was going to be here and go really quickly. Is the narrative that you're holding on to being and gone. Right. Real world assets. You know, something I'm pretty bullish on, but the narrative seems to be pushing and a lot of people trying to build in this space. The narrative might be dying down. There might be other sectors. DeFi is one that I'm super bullish on, but it's not really a sexy narrative. It's been around for a long time, so you've got to look at the underlying value. The metaverse. Same thing. These narratives that have been around for a long time may have their time in the sun again, but are probably not going to have all the heat of the moment like a super new narrative coming out, say on Solana or let's depin. Some of these new niche narratives might have more time in the sun in the next few months versus some of these older narratives. So you need to be aware of that too. And are there any upcoming catalysts? We look at upcoming developments on the project. So if we look at Solana, where they're looking at their updates on their blockchain, or if you're looking at Ethereum and their updates that they're pushing out, going deeper on these individuals projects to see if there's upcoming catalysts that you can get behind before the market has actually contributed to it. A clear sign for me that cryptocurrency is dead is that they have launched partnerships or they have their catalysts and they have upgrades and the market is just not responding at all. Right, that could be the macro market. Crypto could be chopping sideways, but it could have an effect. But really, if the underlying asset is really not doing anything, it's sinking, they're pushing out updates and partnerships and it's really not doing anything to the price. That is a clear sign for me that the project might be dead. So fundamental analysis is only one part of the equation. There's a few other you need to review, and one of them is your emotional bias. As I mentioned before, there's a few things you need to review in terms of your emotional attachment to the project. There is often an emotional part attached to investing. As I said before, where we're excited about the narrative, we believe in the project, we're friends with the founder, we're invested a lot, we're emotionally attached. But that can create this emotional bias with the project which gets you thinking in a frame of mind that isn't logical, that isn't looking at both sides of the equation. Personal bias can make you hold on to projects longer than you should. And I've been there before, especially after a cycle, you've round trip something you hope it's going to come back. But the opportunity cost of holding that project that may be dead versus reinvesting is substantial. And there's other things you can think about as well if your project's down, right? Whether it be tax offsets, you know, maybe be able to offset that as a capital loss against, you know, other investments, just freeing up capital to buy into new projects. There's a range of other things you can consider if your project's down. But a common trap I see is people holding out for cryptocurrency just to get back to all time high, which for most projects is actually nearly impossible when you look at their token economics. So a question I like to ask myself when reassessing an emotional decision is would I be happy to reinvest all my money at this price the tokens at? And if it's a no, you most likely probably should sell. And for most of you like me, that's probably a very big no, right? So you need to be wary of that. If you're thinking about, you know, holding onto a coin, that's the price that you're happy to be buying in at, same as it's going up. As you're compounding that growth, are you happy to be holding that coin at that price versus selling? It's an important question you need to ask yourself. One more really important thing when thinking about your coin is when it's down 20, 30, 40% is that it does not equal that that percentage that has gone down that you need that percentage to go up to get back to where you were before. If you have a look at this chart, the further the price of that token goes down, the more the price needs to return to get back to break even. For example, if your price of the coin is down 20%, you need it to increase 25% to get back to break even. If you're down 50% on that token, you need to go up 100% to get to break. If you're down 90%, your project needs to go up 900% just to get back to break even. And that is on market cap terms. So if your token has increased supply, which Most of them have over the last few years and is down 90%. That token may need to be going up more than 1,000%, more than 10 times its current price, just to break even. Right? Versus moving that capital out, reinvesting into a new project and making the returns. When you're starting out a new level, it's really important to understand that the next big thing is understanding the importance of the sunk cost fallacy. The more money you lose on a project, the more emotional attachment you probably have that you want to double down and buy more of. But what you're actually doing is just throwing bad money at even worse projects. So understand that you might have an emotional bias towards that project and reassess it. Just because something's down doesn't mean you need to hold on to it. There might be a much better investment that you can move that money away from that project that is dead, that you're emotionally attached to, into a new narrative that has better token economics that can get you that price that you want, rather than holding on to something, hoping to the crypto gods that we're going to get a thousand percent returns just to break even. Okay, move on. Don't be emotional and make better logical decisions. Now, the tax implications as well is something you should seriously consider. And I see a lot of people overlooking this. If you have tax structures where you can actually claim capital losses against future gains, this is a super important, important strategy that you can utilize. So if you're making money in two or three projects or your portfolio is up and you're making capital gains, but some of your projects are down, you can actually sell these coins and offset those gains. It's something that a lot of people don't think about, you know. So understand that and talk to your accountant, talk to your tax specialist to understand where you are in your, in your tax structure. But utilizing tax is super important and most people overlook this as a strategy. When you're losing out on some coins and some bad investments. The next is consolidation strategies. And it's something that I've done a number of times before, especially when I was first starting out and I had 20, 30, 40 altcoins. A lot of them were underperforming. Most of them I didn't even know what they did is what I consolidated those coins. I reviewed the underperforming ones, reviewed the coins that I didn't like, and I consolidated them into more of a higher conviction play. So rather than having 20, 30, 40 altcoins, I had 10 that I was super convicted on. So by doing this, you're focusing on quality, not quantity. You don't need to be chasing everything. I'd much prefer to have five or 10 assets that I have high conviction in that I think are much better quality than holding on to 20 or 25 coins when most of them might be underperforming and dead. Now you've got your plan in place, you're going to want to watch my next video on how to sell your cryptocurrency and create a sell strategy. I believe this is the most important part of making money in a bull market. So make sure to watch my next video. And if you're ready to take crypto investing more seriously, make sure to check out my company Collective Shift, and I'll see you on our next video.